India May Manufacturing PMI at 50.8... Lowest Since July Last Year

Impact of COVID-19 Resurgence on Manufacturing Industry Contraction

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] IHS Markit announced on the 1st that India's manufacturing Purchasing Managers' Index (PMI) for May was recorded at 50.8.

This is a decline from the previous month's 55.5 and is lower than the forecasted 52.0.

The PMI index, which indicates manufacturing business trends, signifies economic expansion if it exceeds the baseline of 50, and contraction if it does not. India's May PMI of 50.8 barely surpasses the expansion threshold.

It is also the lowest level in nearly a year since recording 46.0 in July last year, showing a decline for four consecutive months.

The contraction in India's manufacturing business trends compared to forecasts is analyzed to be due to the ongoing COVID-19 pandemic sweeping across the country.

Currently, India has recorded over 28 million cumulative COVID-19 cases and more than 330,000 deaths, ranking second in the world by number of confirmed cases.

Polyanna de Lima, an economist at IHS Markit, stated, "Across India's manufacturing sector, business trends such as sales volume, new orders, and production noticeably contracted last month," adding, "This resulted in the lowest manufacturing PMI in 10 months."

De Lima also forecasted, "The economic outlook for India until the end of the year is darkening," and "This atmosphere may lead to a contraction in new corporate investments and a reduction in jobs in India."

The Reserve Bank of India is also expected to maintain the current benchmark interest rate through this year in line with this economic outlook.

Meanwhile, the PMI index is calculated based on corporate surveys regarding new orders, shipments, inventory levels, and other factors.

This content was produced with the assistance of AI translation services.